By Chinenye Anuforo and Chinwendu Obienyi
Mr. Umaru Kwairanga is the Chairman, Organising Committee of the proposed national workshop of the Chartered Institute of Stockbrokers (CIS). In this interview with Daily Sun, he gave reasons why the capital market is on rebound since beginning of this year. He also spoke on other capital market issues.
Excerpts:
Assessment of Capital Market
The capital market has been on a rebound in 2017, especially, from the end of the first quarter till now. The recent initiatives taken by the Central Bank of Nigeria (CBN) to solve the problem of chronic scarcity of forex has been the reason for the economy rebound and the capital market in particular.The All Share Index has swung into positive territory after months of persistent declines and trading volumes have increased dramatically in the last couple of months.
The macro economic instability impacted trading on the NSE very badly. The index and market capitalization were down by almost 5 per cent while the uncertainty lasted and trading volumes halved from previous years. As you know , participation in our capital market has been slightly skewed in favour of foreign portfolio investors for most of the past decade and this category of investors refused to participate in the Nigerian Capital Market while the forex issues persisted. I believe the drastic dip in liquidity of the Nigerian Capital Market was partly due to the refusal of this category of investors to play in the market while the macro economic issues were prevalent.
Investor confidence
Investor confidence is gradually returning as can be seen by the positive numbers in recent weeks. Our prayer is that the Government ,the Central Bank of Nigeria and other regulators remain consistent in their resolve top tackle the issues that have held our economy and this great country’s potential down in recent years. That will definitely boost investors confidence further and guarantee stability
CIS national workshop
We chose the theme, “Transiting from Recession to a Global Power: A Working Template for Nigeria “, because we believe that what has happened in the last year is an aberration. Nigeria with its bountiful human and material resources and untapped opportunities should be on a consistent growth trajectory to taking its rightful place as a global power. Some mistakes were however made over the years especially in the last four decades that have consistently held back our potential. Our belief as an institute is that with the right strategies in place and proper implementation, we can reset this country and fast track it to its rightful place in the comity of nations. We see the recession as a temporary blip and are confident that with the right template , we can attain our rightful status as a global power.
Benefits of the workshop
The theme will elicit a viable working template that the managers of the economy can leverage on to drive growth in the country. We anticipate that speakers will come up with feasible and workable strategies for important organs of government and the private sector to implement in order to drive momentum in various sectors. This will benefit the economy, the citizenry and ultimately the capital market as the capital market is but a barometer of the economy. When an economy is vibrant and growing, the capital market will mirror this. If otherwise, the market will equally reflect the situation. I must be quick to add that our market is forward looking.
The workshop will be practical and offer implementable strategies on a wide ranging variety of problems holding our economy back. It will therefore not be just another talk shop. It shall be a new platform for engaging the government on the need to utilize the capital market for successful implementation of this year’s budget.
Who are the key speakers?
The DG of the SEC. Apart from him, we also have the current President of The Nigerian Stock Exchange, Aigboje Aig Imoukhuede,the CEO of The Nigerian Stock Exchange, Oscar Onyeama,the CEO of FMDQ, Bola Onadele Koko, NBA President Mr A B Mahmoud, the DG DMO, the MD of MTN Nigeria. We are also expecting foremost businessman, Alhaji Aliko Dangote and the Governor of Edo State, Godwin Obaseki to be available to share their experiences with us.
2017 budget deficit
I think the funding of government deficits is an ongoing issue and cannot be tied to the current year’s budget alone. The capital market exists to bridge the gap between investors who have funds to invest and users whether government or the private sector who need funds at any particular time. As long as the Federal Government puts in place policies and mechanisms to ensure prudence and accountability and offers competitive returns ,the capital market will remain a viable option for funding its deficits
Roles of the CIS in building investor confidence
CIS has been very proactive in ensuring that members of the Institute attain and maintain the highest standards in terms of professionalism,knowledge and character. Any investor dealing with a licensed member of the Institute is assured that he or she is dealing with a professional who knows his onions and who will always abide by the highest standards of integrity. At the same time CIS is also waging a relentless war against quackery in the profession to ensure that investors in the Nigeria’s market are protected at all times.
How would you advise investors?
My advice has always been that investors should make investing a regular habit, invest after thorough research and more importantly seek the opinion of a professional stock broker. Keep an eye on your investments and the fundamentals of the companies you invest in. Buy low,Sell high. Our stock market has growth potentials as many stocks are still trading below their intrinsic values. This is a good time to move in.